Two firms facing a demand curve are P = 50 -5Q where Q = Q1 + Q2. The cost functions of the two firms are: C1(Q1) = 20 + 10Q1 C2(C2) = 10 + 12Q2 Based on this information: a. Suppose both companies have entered the industry, then what is the price? and the profit-maximizing amount for the two firms under conditions perfectly competitive market? b. What is the quantity, price and profit of the two firms if companies collude in pricing? c. What are the quantities, prices, and profits of the two firms if they do the Cournot strategy, and draw the reaction curves of the two the company?
Two firms facing a
where Q = Q1 + Q2. The cost functions of the two firms are:
C1(Q1) = 20 + 10Q1
C2(C2) = 10 + 12Q2
Based on this information:
a. Suppose both companies have entered the industry, then what is the price?
and the profit-maximizing amount for the two firms under conditions
perfectly competitive market?
b. What is the quantity, price and profit of the two firms if
companies collude in pricing?
c. What are the quantities, prices, and profits of the two firms if they
do the Cournot strategy, and draw the reaction curves of the two
the company?
d. What are the quantity, price, and profit of the two firms if they
carry out the stakeberg strategy.
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